JPMorgan Has $20 Billion at stake as Dimon makes fun of the Chinese Communist Party
Jamie Dimon’s eyebrow-raising joke about JPMorgan Chase & Co. lasting longer than the Chinese Communist Party has so far been met by public silence from Beijing officials.
But with nearly $20 billion exposure to the world’s second-largest economy — and big ambitions to expand even further — the US bank has a vested interest in maintaining cordial relations with a government sensitive to anything can be interpreted as doubting its legitimacy.
In a sign that JPMorgan is geared up for the risk of a backlash, members of the bank’s government relations team and its Chinese offices had internal discussions about Dimon’s comments after he spoke in a panel discussion Tuesday, according to a person known. with the case.
While some executives expressed concern that the joke could be considered insensitive, the government relations team told the group that Dimon intended to highlight the longevity of JPMorgan’s China operations rather than criticize the party. As of Wednesday afternoon in China, the bank had not yet communicated with government officials on the matter, the person said, asking not to be identified when discussing private information.
A JPMorgan spokesperson declined to comment. Asked for comment during a regular press conference on Wednesday, China’s Foreign Ministry spokesman Zhao Lijian said: “Is it really necessary to quote such comments that are just to get people’s attention?”
Chinese media, often quick to criticize the country’s alleged disdain by international companies, have not yet covered Dimon’s joke, even as they wrote about several of his other comments about cryptocurrencies and US policy risks.
“We hope to stay there for a long time to come,” Dimon said of China as he spoke at the Boston College Chief Executives Club. He also shared the joke he made on a recent visit to Hong Kong: “The Communist Party is also celebrating its 100th year of JPMorgan. And I bet we can hold out for longer.”
One of the few posts about the comment on Weibo, China’s Twitter-like social media platform, came from Shen Yi, a professor at Fudan University with more than 1.5 million followers. “This guy is really quite arrogant,” Shen wrote. He later added: “It appears that JPMorgan does not want its newly acquired license.”
Earlier this year, JPMorgan became the first Wall Street firm to take full ownership of a securities firm in China. The bank’s total exposure to the country was $19.7 billion in September, mainly from loans and deposits, trade and investment, according to a registration filing. While that’s still little compared to JPMorgan’s nearly $3.8 trillion balance sheet, Dimon has called China one of the world’s greatest opportunities.
The market also carries many risks. China has a history of taking action against companies and individuals who appear to disdain or question the government’s policies, particularly on sensitive issues, including Taiwan, which Dimon also referred to on Tuesday.
In 2019, UBS Group AG came under pressure to fire its chief economist, Paul Donovan, after making a comment about a “Chinese pig” in a note on rising consumer prices. He later apologized, saying it was “meant to be innocent”.
China’s financial markets are a major draw for the world’s largest banks, with billions of potential profits at stake in investment banking and asset management. Wall Street firms are expanding their presence in the country despite heightened tensions between the US and China and an increasingly opaque regulatory environment as President Xi Jinping cracks down on parts of the private sector.
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